The Political Economic Dimensions of Executive Compensation Reform: Can the Foundations of Shareholder Primacy Be Sustained in the Post - Crisis Regulatory Environment?
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Abstract
What is absent in much of the literature on executive compensation reform is a deeper appreciation of the shift that has occurred since the latest financial crisis away from performance-based corporate governance arrangements to an approach that seeks to put the brakes on a runaway train, the shareholder value model and its relentless pursuit of shareholder wealth at all costs. By situating this debate into a broader discussion of corporate purpose, corporate governance and the law’s role in how business corporations are run in their social, economic and political environment this project seeks to shed some light onto what really is at stake in this debate, whether the existing shareholder primacy paradigm for conceptualizing and fashioning a solution for constraining managerial power in the firm is a viable solution moving forward from the crisis.